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Market Lab Report - After the Open 3/15/17

Published:

15 Mar 2017 13:42 ET

Major averages fell yesterday on lower volume. The Federal Reserve concludes its two-day meeting today. There has been some nervousness ahead of the today's conclusion as market participants await commentary on the number of rate hikes for the rest of 2017 as well as on the anticipated strength of the economy going forward.

The argument of "3 steps and a stumble" in terms of how markets tend to correct after the third rate increase is moot. The fed funds rate remains negative. This rule tends to apply to when the FFR is positive. The US is coming out of the lowest historic rates in its history, thus this time is indeed different. The steepening yield curve is a sign of the market believing that the economy will continue to strengthen.

That said, don't outright dismiss the possibility that as a method of self-preservation, the Fed going forward may attempt to aggressively hike rates to kill the bull market to burn President Trump, making his administration look bad. As we know, Trump has questioned the existence and need for the Fed.

Focus List Notes

AMZN is still holding at the top of its base following a breakout three weeks ago. The stock has shown inclination to move higher since the breakout, however.

BABA showed no follow-through to Monday's pocket pivot, falling back into its base as it has done following previous displays of temporary strength over the past six weeks.

CC is in a three-week flag formation as it finds near-term support along the 20-dema.

COHR found support at its 10-dma yesterday following Monday's pocket pivot. The stock is being added to the S&P 500, one reason why it posted a pocket pivot on Monday.

NFLX found support at its 10-dma yesterday but remains in seven-week price range it has been locked in since its late January buyable gap-up following earnings.

NTES is continuing to hold at its 20-dema, but this should be watched since a breach of this near-term support level could bring into play a test of the 278.80 low of its February buyable gap-up.

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